Summary of Key Changes Proposed by Nair Committee on Psl Targets
Summary of Key Changes Proposed by Nair Committee on PSL Targets for Indian Banks
Domestic SCBs Existing Proposed 40% 40% 18% (with 4.5% 18% (9% SFMF) max in-direct) No Target 7% to Micro No Target 10% 1% of total adv No Target 10% Abolish Foreign Banks Existing Proposed 32% 40% No Target No Target 10% (60% of 10% to Micro) 12% No Target 15% (7% of total to Micro) 15% (< INR 10 cr) No Target -
Total Advances Agriculture MSE Export Weaker Sections DRI
Agriculture (Domestic Banks)
Agriculture is critical sector for ensuring food security and poverty alleviation. This sector needs to be seen as a single set of activities, encompassing production, storage and distribution. As there is seamless connectedness of the entire agriculture value chain its impact on output, income and employment in rural economy is highly positive. Therefore ‘Agriculture and allied activities’ may be a composite sector within priority sector. The target for this sector is proposed at 18% of ANBC/CEOBE whichever is higher. A sub target of lending to Small and Marginal Farmers equivalent to 9% of ANBC, to be achieved in stages till 2015-16. Banks are also encouraged to ensure that number of outstanding beneficiary accounts registers a minimum annual growth rate of 15%. Considering that availability of credit rather than the channel or mode of delivery of credit is important and that credit to entire sector rather than the individual activities within the individual sector is important, concepts of ‘Direct’ & ‘Indirect’ lending to agriculture sector may be integrated in order to have all encompassing approach towards agriculture sector. This means that the earlier ceiling of 4.5% limit through ‘indirect channel’ is proposed to be done away with. To ensure that stressed assets in this sector do not arise, the Committee has strongly recommended the establishment of an Agriculture Credit Risk Guarantee Fund. Roadmap for achievement of sub-target under SFMF 21 PSBs and 15 Private Sector Banks
Domestic SCBs Existing Proposed 40% 40% 18% (with 4.5% 18% (9% SFMF) max in-direct) No Target 7% to Micro No Target 10% 1% of total adv No Target 10% Abolish Foreign Banks Existing Proposed 32% 40% No Target No Target 10% (60% of 10% to Micro) 12% No Target 15% (7% of total to Micro) 15% (< INR 10 cr) No Target -
Total Advances Agriculture MSE Export Weaker Sections DRI
Agriculture (Domestic Banks)
Agriculture is critical sector for ensuring food security and poverty alleviation. This sector needs to be seen as a single set of activities, encompassing production, storage and distribution. As there is seamless connectedness of the entire agriculture value chain its impact on output, income and employment in rural economy is highly positive. Therefore ‘Agriculture and allied activities’ may be a composite sector within priority sector. The target for this sector is proposed at 18% of ANBC/CEOBE whichever is higher. A sub target of lending to Small and Marginal Farmers equivalent to 9% of ANBC, to be achieved in stages till 2015-16. Banks are also encouraged to ensure that number of outstanding beneficiary accounts registers a minimum annual growth rate of 15%. Considering that availability of credit rather than the channel or mode of delivery of credit is important and that credit to entire sector rather than the individual activities within the individual sector is important, concepts of ‘Direct’ & ‘Indirect’ lending to agriculture sector may be integrated in order to have all encompassing approach towards agriculture sector. This means that the earlier ceiling of 4.5% limit through ‘indirect channel’ is proposed to be done away with. To ensure that stressed assets in this sector do not arise, the Committee has strongly recommended the establishment of an Agriculture Credit Risk Guarantee Fund. Roadmap for achievement of sub-target under SFMF 21 PSBs and 15 Private Sector Banks